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Commercial Leases Favor Landlord

Commercial leases are long, detailed and usually favor the landlord. They do not have consumer protections like residential leases. ¬†Therefore, it is important to read and understand all of its terms. It is helpful, and well worth the investment, to seek legal advice. It is common for the tenant to pay repairs and maintenance needed on the space that is leased. In addition, most commercial leases require the tenant to pay a share of the common area expenses, such as landscaping and the parking lot. ¬† Since the landlord has control of the common area expenses, I recommend that the lease contain a provision that permits tenant to confirm the accuracy of these expenses. The lease may include a confidentiality clause which prohibits tenant from discussing the lease terms and expenses with other tenants. This can be violated quite innocently so the tenant needs to be aware that there can be consequences if they violate this clause. The landlord may ask for a security interest in the tenant’s inventory and personal property used in the ordinary course of business. The tenant needs to understand the power that the landlord has under the lease or they could find themselves in default and locked out of their business.

Written on: October 1, 2015


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